Advertisement
Explainer | What is Swift and what would happen if Russia is banned?
- About 300 Russian financial institutions, including many that have been sanctioned, use the swift financial messaging system
- Banning Russia from Swift would mean its banks can no longer use it to make or receive payments with foreign financial institutions
Reading Time:3 minutes
Why you can trust SCMP
21
US and European leaders have announced a package of sanctions on Russian banks and enterprises, freezing assets and hobbling their ability to raise funds internationally, after Russia invaded Ukraine on Thursday.
Advertisement
Ukrainian President Volodymyr Zelensky has called for Russia to be cut off from the Swift financial messaging system, but that seems unlikely in the short term, as US President Joe Biden said “that’s not the position that the rest of Europe wishes to take”.
Here are some key facts about Swift – the Society for Worldwide Interbank Financial Telecommunication – and potential consequences of shutting Russia out of it.
What is Swift?
The system was founded in 1973 to make cross-border money transfers more efficient and has become critical to global financial infrastructure. It replaced the Telex technology that most banks used before the early 1970s.
Swift is used by 200 countries and territories. Last year, it recorded an average of 42 million messages per day, while its traffic grew by 11.4 per cent from a year earlier.
The cooperative society is owned by member banks and does not handle transfers itself.
04:08
US, Nato allies, target Russia with sweeping economic sanctions over Ukraine invasion
US, Nato allies, target Russia with sweeping economic sanctions over Ukraine invasion
Are Russia and China reliant on Swift?
Advertisement